Dresdner and Unicredito set for merger talks

EXECUTIVES from Dresdner, the German banking giant, are to meet their opposite numbers at Unicredito, Italy's number three bank, later this week for talks which could lead to the first major cross-border banking deal in the merger wave sweeping the European continent.

The move follows the rejection at the weekend of a $13.6bn (pounds 8.4bn) bid by Unicredito for rival Banca Commerciale Italiana (Comit), which has left Unicredito's well-regarded chief executive, Alessandro Profumo, scouting around for alternatives.

Spokesmen for Dresdner confirmed yesterday that the bank is seeking "co- operation partners" in Italy, although they refused to be drawn on any specifics relating the planned meeting with the Unicredito management.

Dresdner, appears to have been stung into action by moves by its arch- rival Deutsche Bank, which last week met Mediobanca, the Machiavellian Milanese investment bank, for talks about raising its existing 0.75 per cent stake in Unicredito - although Deutsche chief executive Rolf Breuer yesterday took advantage of the German bank's annual meeting to quash rumours in Frankfurt banking circles that he was preparing an all-share merger bid for Unicredito along the DaimlerChrysler model.

Unlike Deutsche, which has a large retail presence in Italy thanks to the 1994 acquisition of the former Bank of America network there, Dresdner is still a relative outsider in Italian terms.

Its first foray into the Italian market came last year when it acquired Albertini, a Milan-based stockbroking firm, from France's Societe Generale.

Deutsche has also acquired a 4.56 per cent stake in Comit - giving it yet another potential entry point into the Italian banking sector.

Mr Profumo, say analysts, is under pressure to pull off a friendly deal within the next few months because 40 per cent of the bank is in the hands of a series of charitable foundations who are keen to sell.